Wichita 2Q23
Multifamily Market Report
$850
average rent
94.6%
average occupancy rate
$115.2M
annual sales volume
4.7%
YoY rent change
-1.4 POINTS
yoy occupancy change
9
annual individual transactions
Supply & Demand
2Q23
300 Units
QUARTERLY DEMAND
YTD: 78
171 Units
QUARTERLY COMPLETIONS
YTD: 189
Annual Demand vs Completions
-
Completions
-
Demand
Demand Trends
- Following four quarters of negative absorption, the Wichita apartment market rebounded, with positive demand observed in the second quarter of 2023. The absorption of 300 units aligned with the typical levels seen during the traditionally crucial spring leasing season.
- The surge in demand was most noticeable in the Central Wichita/Riverside submarket, which alone accounted for the absorption of 204 units this quarter.
Completion Trends
- In Q2 2023, the inventory of apartments in Wichita expanded by 171 units, pushing the year-to-date total to 189 units.
- A significant portion of this new stock is attributed to the initial 159 units of the 372-unit Avante community that became available in April. The balance of units in this community are expected to be delivered in October.
Demand Outlook
- Over the next four quarters, the Wichita apartment market is projected to maintain positive demand, with absorption primarily concentrated in the northern region of the market stretching from Maize, KS to Bel Aire, KS.
- Notably, Bel Aire, KS stands out as the future location of Integra Technologies’ new headquarters, poised to bring 2,500 jobs to the local market.
New Supply Outlook
- Identifying the northern area of Wichita as the epicenter of economic growth, developers have strategically targeted this portion of the market.
- Of the 1,222 units projected for delivery over the next four quarters, a significant 84% (1,025 units) will be located in the northwest suburbs and I-325 corridor. The remaining units are set to be delivered to the Central Wichita / Riverside submarket.
Occupancy & Rent Trends
RENT VS OWN
MONTHLY PAYMENT
$1,571
Average Monthly Mortgage Payment
$850
Average Monthly Rent
* The Average mortgage payment is based off a median home sales price of $246,500 as reported by the Central Kansas Association of Realtors as of June 2023.
Occupancy trends
After peaking with an all-time high occupancy rate of 97.1% in the first quarter of 2022, average occupancy in Wichita slid down quarter over quarter to reach 94.2% by the first quarter of 2023. However, the strong spring leasing season triggered the first upward shift in occupancy since Q1 2022, leading to an overall increase of 40 basis points to 94.6%. Occupancy rates were relatively consistent across Wichita’s submarkets. The North Wichita/University submarket boasted the highest rate at 95.2%, while the West Wichita submarket had the lowest, but still healthy, rate of 94.0%.
This spring, renters gravitated towards Class A properties, which saw occupancy rates jump 150 basis points compared to Q1. Class B and C properties also saw quarterly increases, although these were more modest at 20 and 10 basis points, respectively. Minor fluctuations are anticipated over the next four quarters as new supply enters the market, but the impact is expected to be minimal. The occupancy rate is projected to remain stable, hovering between 94% and 95%. These consistent rates indicate a healthy market for apartment owners and operators in the Wichita area.
RENTAL TRENDS
Mirroring trends seen in most apartment markets across the country, the growth rate of rent prices in Wichita is decelerating from the peak gains observed last year. Nonetheless, Wichita demonstrated a healthy annual gain in average rent of 4.7%, pushing the monthly rate for new leases to $850. Even with a slowdown in rent growth, Wichita outperformed both its own ten-year average growth rate of 2.9% and the national average of 1.5% in Q2 2023. While Wichita didn’t experience the extreme rent increases seen in many markets post-pandemic, it has successfully avoided the steep rent cuts that many of these markets are now facing. The saying ‘slow and steady wins the race’ seems particularly apt in this context.
On a submarket level, the West Wichita submarket saw the metro’s highest rent growth at 6.1%, raising the monthly rental rate to $856. However, performance varied by product class. Class C properties achieved the highest annual rent growth rate at 6.3%, although this was a deceleration from the 7.8% of the previous quarter. Class B properties experienced the most significant deceleration, with a yearly increase of only 3.8%, down from 6.6% the previous quarter. Meanwhile, Class A properties experienced a modest increase in the velocity of annual rent growth, moving from 5.3% in the first quarter to 5.6% in the second quarter.
Submarket Rent & Occupancy
| Submarket | Average Occupancy | Annual Occupancy Change | Average Monthly Rent | Annual Rent Change |
|---|---|---|---|---|
| Central Wichita/Riverside | 94.80% | 0.90% | $856 | 5.90% |
| East Wichita | 94.60% | -2.70% | $759 | 3.60% |
| North Wichita/University | 95.20% | -1.60% | $919 | 3.50% |
| West Wichita | 94.00% | -1.60% | $856 | 6.10% |
| Wichita, KS | 94.60% | -1.40% | $850 | 4.70% |
Units Delivering in 2023
| Property Status | Property Name | City | Submarket | Construction Start Date | Leasing Start Date | Construction Finish Date | Year Built | Developer | Total Units |
|---|---|---|---|---|---|---|---|---|---|
| Under Construction/Lease-Up | Avante | Wichita | West Wichita | 04/01/2022 | 03/01/2023 | 10/01/2023 | 2023 | Private Developer | 372 |
| Under Construction | HiTone Lofts | Wichita | Central Wichita/Riverside | 04/01/2022 | 08/01/2023 | 12/01/2023 | 2023 | Ferguson Property Group | 72 |
| Under Construction | Uptown Landing II | Wichita | Central Wichita/Riverside | 04/01/2021 | 07/01/2023 | 12/01/2023 | 2023 | Brand Investments | 125 |
| Under Construction | North Andover Road & East 21st Street | Andover | East Wichita | 10/01/2022 | 06/01/2024 | 01/01/2025 | 2025 | Private Developer | 250 |
| Under Construction | Plazzio Place | Wichita | North Wichita/University | 04/01/2023 | 01/01/2024 | 07/01/2024 | 2024 | Laham Development | 40 |
| Under Construction | Stoney Pointe II | Wichita | North Wichita/University | 01/01/2022 | 09/01/2023 | 10/01/2024 | 2024 | Edward Rose and Sons | 216 |
| Under Construction | Fairmount Flats | Wichita | North Wichita/University | 12/01/2022 | 08/31/2023 | 12/01/2023 | 2023 | Bonavia Properties | 50 |
| Under Construction | East 17th Street North & North Gentry Drive | Wichita | North Wichita/University | 10/01/2022 | 08/01/2023 | 06/01/2024 | 2024 | Private Developer | 277 |
| Under Construction | K-96 & North Ridge Road | Wichita | West Wichita | 05/01/2022 | 09/01/2023 | 06/01/2024 | 2024 | Private Developer | 166 |
| Under Construction | Ridge Pointe | Wichita | West Wichita | 05/01/2022 | 10/01/2023 | 04/01/2024 | 2024 | HCW Development LLC | 201 |
Sales Activity
The deal flow for individual multifamily transactions was slightly higher in the year ending in 2Q 2023 compared to previous years. Over the past five years, annual sales volume for individual property transactions averaged $80 million. However, the past 12 months saw a boost, with $115.2 million worth of multifamily assets changing hands. Notably, nearly 70% of this volume was recorded in the last two quarters of 2022. Despite this, the $34.8 million in transaction volume in the first half of 2023 was only outpaced by 2020’s $37 million figure, when comparing equal timeframes. The 2023 transaction volume was primarily driven by the sale of the 336-unit, 1970’s vintage Fox Run apartments in East Wichita in May of this year. So far this year, three property transactions have been executed, in contrast to the nine transactions recorded in the 12-month period ending in June 2023.
- Monarch
- LV Realty Capital
- Dune Investments
- Anderson Crain
- Maxus Realty Trust
- Straqr
TRANSACTION VOLUME
Annual Transaction Volume
Y-O-Y Change
Annual Individual Transaction Count
Price Per Unit
Annual Price Change
* Trailing 4Q average PPU
* Preliminary Data from RCA – Individual transaction $2.5M +
Economy
In May 2023, the Wichita Metro showcased steady job growth, adding 3,900 new positions as reported by the Bureau of Labor Statistics (BLS). The overall job growth rate was 1.3%, with various sectors contributing to the increase. The government sector led the way with a growth rate of 3.7%, resulting in an addition of 1,600 new jobs. This was closely followed by the manufacturing sector, which grew by 3.6% and added 1,800 jobs. The mining, logging, and construction sector also expanded, adding 400 jobs at a growth rate of 2.3%. The region’s total nonfarm employment for May 2023 stood at 307,500, signifying the economic resilience of Wichita.
3.9K
May Annual Jobs Created
1.3%
May 23 Employment growth
3.0%
May 23 Unemployment rate
3.4% us may rate
Top 5 Employment Sector Annual Change
Hover over circles to view data
| Sector | Change from May 2022 to May 2023 | Percent Change |
|---|---|---|
| Manufacturing | 1,800 | 3.60% |
| Government | 1,600 | 3.70% |
| Leisure and hospitality | 800 | 2.40% |
| Mining, logging, and construction | 400 | 2.30% |
| Education and health services | 400 | 0.90% |
| Trade, transportation, and utilities | 100 | 0.20% |
| Financial activities | 0 | 0.00% |
| Information | -100 | -2.60% |
| Other services | -100 | -0.90% |
| Professional and business services | -1,000 | -2.80% |
Major Economic Developments
Integra Technologies HQ and Fab Facility
$2.5B Capital Investment
2.5K Estimated Job Creation
100 Acres
Bel Aire, KS Location
2025 Expected Completion
Ballpark District by EPC Real Estate Group
$75M Capital Investment
Mixed-Use Development Including Hotel, Office, Retail,
and Restaurant Space
Unscripted Wichita Anchor Tenant
Adjacent to Riverfront Stadium Location
2024 Expected Completion
McConnell Air Force Base
$617M Total Economic Impact
17,000 Military and Civilian Employees
2,400 Jobs Estimated for Indirect Job Creation
Over $574M Yearly Payroll
Southeast Wichita Location
Market Outlook
The Wichita apartment market, particularly in the northern region, is poised for a favorable trajectory over the next four quarters. This optimistic outlook is fueled by strong demand and exciting developments that are set to bolster the local economy. One such key development is the establishment of the Integra Technologies headquarters in Bel Aire. This project alone is projected to generate 2,500 local jobs, thereby further strengthening demand. With the introduction of new supply in the coming quarters, minor fluctuations in apartment fundamentals may occur. However, these variations are expected to be minimal and are unlikely to disrupt the market’s overall stability. This level of resilience in the face of change is a promising sign for apartment owners and operators in Wichita. It signifies a healthy market that is equipped to handle shifts and is primed for continued growth.
Sources: RealPage; BLS; MSCI; Kansas City Business Journal; Economic Development Corporation of Kansas City; The Kansas City Star
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